Financial Security for a Special Needs Child

Q. Our 11-year-old son, Nathan, has autism and will likely need care for the rest of his life. This has put quite an emotional and financial strain on my husband and me. My parents, who are wealthy, are willing to help, but we’ve heard it’s not a good idea to put our son in their estate planning documents because it might affect his ability to qualify for government programs. Also, if something happens to my parents, and to my husband and I, how can we ensure that Nathan has everything he needs?

A. According to the U.S. Centers for Disease Control and Prevention, autisms pectrum disorder (ASD) affects 1.2 million (or 1 in 68) Americans under 21. Another study conducted by RAND Corp. that was published in the March 2014 print issue of “Pediatrics,” states that the cost of services for children with ASD averages more than $17,000 per child each year, including doctor visits, prescriptions, educational needs, and therapies. This is quite a hefty bill for many families, who are often concerned about what will happen to their special needs child if something should happen to them.

In answering your question, I recommend not leaving assets directly to your son with special needs because if he owns or inherits property above a certain dollar value — generally $2,000 — it could make him ineligible for certain government programs, such as Supplemental Security Income (SSI) and Medicaid.

A better solution is to set up a Special Needs Trust that would allow your family to safeguard your son’s eligibility for benefits while also providing for additional needs not covered by government programs. A Special Needs Trust is a trust designed to hold assets for an individual with special needs who may not be able to manage his or her own finances. These trusts can help pay for supplemental needs and care for the beneficiary without affecting eligibility for benefits such as Medicaid and SSI. I recommend that in addition to setting up a Special Needs Trust, you should include a “letter of intent.” This letter, which can be drafted alongside a Special Needs Trust, provides a guide for your son’s caregivers or the courts on how you would like your son to live when you are no longer around.

As an added precaution, many parents utilize advocacy committees or microboards to oversee the actions of trustees and ensure people with disabilities are being cared for as intended by their trusts. Committees usually consist of a few members and can include parents, care managers, social workers, lawyers and other relatives or friends, and generally meet several times a year to discuss the beneficiaries’ needs. Please visit the Special Needs section of our Website for more details on Microboards.

Understandably, for many families dealing with the day-to-day struggles of caring for a child with special needs, the last thing in their minds is planning for the future. However, to reiterate, it is important for parents to take the right steps to make sure their child is financially secure and cared for, including:

Hiring an attorney who is experienced in creating special needs trusts, such as myself;

Clearly spelling out your wishes for the disbursement of trust funds within the trust document;

Finding someone you can trust that has your son’s best interests at heart to serve as trustee and/or

Hiring an institutional trustee that has a reputation for utilizing social workers and case managers to monitor the welfare of beneficiaries and determine how trust funds should be spent.

The Fairfax and Fredericksburg Special Needs Law Firm of Evan H. Farr, P.C. can guide you through this process. Be sure to check out our dedicated Virginia Special Needs Website at https://www.farrlawfirm.com/practice-areas/special-needs-planning/. If you have a loved one with special needs, call 703-691-1888 in Fairfax or 540-479-1435in Fredericksburg to make an appointment for an introductory consultation.

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